Martin Company is considering the introduction of a new product. To determine a selling price, the...

Question

Question

Martin Company is considering the introduction of a new product. To determine a selling price, the company has gathered the f

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

1. Return required = 390000*20% = $78000

Total product cost = 15000*55 = $825000

Markup percentage = return required / total cost

= 78000/825000

= 9.58%

2.

Unit product cost	$55
Markup (55*9.58%)	5.27
Selling price per unit	$60.27

Add a comment

Answer 2

Similar Homework Help Questions

Martin Company is considering the introduction of a new product. To determine a selling price, the...

Martin Company is considering the introduction of a new product. To determine a selling price, the company has gathered the following information: Number of units to be produced and sold each year Unit product cost Projected annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) 18,500 50 $ 58,000 400,000 20% The company uses the absorption costing approach to cost-plus pricing. Required: 1. Compute the markup required to achieve the desired ROI. ((Round...
Martin Company is considering the introduction of a new product. To determine a selling price, the...

Martin Company is considering the introduction of a new product. To determine a selling price, the company has gathered the following information: Number of units to be produced and sold each year Unit product cost Projected annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) 4,000 40 $ 64,000 $330,000 18% The company uses the absorption costing approach to cost-plus pricing. Required 1. Compute the markup required to achieve the desired ROl. (Round...
Martin Company is considering the introduction of a new product. To determine a selling price, the...

Martin Company is considering the introduction of a new product. To determine a selling price, the company has gathered the following information: . Number of units to be produced and sold each year Unit product cost Projected annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) 17,000 $ 50 $ 60,000 $550,000 18% The company uses the absorption costing approach to cost-plus pricing, Required: 1. Compute the markup required to achieve the desired...

Aldean Company wants to use absorption cost-plus pricing to set the selling price ona new product....

Aldean Company wants to use absorption cost-plus pricing to set the selling price ona new product. The company plans to invest $250,000 in operating assets to produce and sell 25,000 units. Its required return on investment (ROI) in its operating assets is 18%. The accounting department has provided cost estimates for the new product as shown below: Per Unit Total Direct materials $8.60 $6.60 $3.60 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling...
Currington Company wants to use absorption cost-plus pricing to set the selling price on a newly...

Currington Company wants to use absorption cost-plus pricing to set the selling price on a newly remodeled product. The company plans to invest $158,000 in operating assets to produce and sell 12,000 units. Its required return on investment (ROI) in its operating assets is 16%. The accounting department has provided cost estimates for the new product as follows: Per Unit Total Direct materials $ 4.40 Direct labor $ 3.40 Variable manufacturing overhead $ 1.40 Fixed manufacturing overhead $ 70,800 Variable...
Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new...

Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $230,000 in operating assets to produce and sell 23,000 units. Its required return on investment (ROI) in its operating assets is 18%. The accounting department has provided cost estimates for the new product as shown below: Per Unit Total Direct materials $ 8.40 Direct labor $ 6.40 Variable manufacturing overhead $ 3.40 Fixed manufacturing overhead $ 182,850 Variable...

Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new...

Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $290,000 in operating assets to produce and sell 29,000 units. Its required return on investment (ROI) in its operating assets is 18%. The accounting department has provided cost estimates for the new product as shown below: Per Unit Total Direct materials $ 9.00 Direct labor $ 7.00 Variable manufacturing overhead $ 4.00 Fixed manufacturing overhead $ 239,250 Variable...
Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new...

Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $220,000 in operating assets to produce and sell 22,000 units. Its required return on investment (ROI) in its operating assets is 18%. The accounting department has provided cost estimates for the new product as shown below: Per Unit Total Direct materials $ 8.30 Direct labor $ 6.30 Variable manufacturing overhead $ 3.30 Fixed manufacturing overhead $ 173,800 Variable...
Lovell Computer Parts Inc. is in the process of setting a selling price on a new...

Lovell Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 45,000 units. Per Unit Total Direct materials $51 Direct labor $27 Variable manufacturing overhead $24 Fixed manufacturing overhead $540,000 Variable selling and administrative expenses $17 Fixed selling and administrative expenses $405,000 Lovell Computer Parts management requests that...

Lovell Computer Parts Inc. is in the process of setting a selling price on a new...

Lovell Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 53,000 units Per Unit Total Direct materials $52 Direct labor $22 Variable manufacturing overhead $18 $689,000 Fixed manufacturing overhead Variable selling and administrative expenses $16 Fixed selling and administrative expenses $424,000 Lovell Computer Parts management requests that...

Martin Company is considering the introduction of a new product. To determine a selling price, the...

Homework Answers